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Tag Archive: Group Benefits

  1. As an employer, do your group benefits expose you to legal risk?

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    Do your group benefits expose you to legal risk?

    Technological innovations have made group plan administration easier than ever. With online enrolment and online claims processing and billings, both you and your employees can interact and manage your benefits plans anytime, anywhere.

    But with this evolution, there has been a shift in where the burden of responsibility and liability lies. While employers have empowered their people to self-manage many aspects of their benefits plans, employers still maintain responsibility should any issues arise, and naturally, there can be legal implications. The shift to a do-it-yourself model has been great, but you are still responsible for ensuring your people know how to use their benefits plans and what their coverage entails.

    There are many responsibilities to consider, but for this article we have focused on the following three main areas:

    • Enrolment forms
    • Life events
    • Staying current

    Always get complete, accurate enrolment forms

    It may sound simple, but having every employee complete an enrolment form is a critical piece of the administration puzzle. This one document ensures the employee is enrolled, registers a legal beneficiary in the event of death, and binds the carrier to insure all those listed in the document. Without this document properly completed and submitted within 31 days of being eligible for the group plan, there can be carrier denials that may cause the employee to pursue legal action, depending on the situation.

    Stay on top of life events

    A “life event” is a term insurance carriers use and is a key rule within a group insurance plan. Life events allow an employee to make changes without any medical questions asked, such as a change in marital status, an addition to the family, or when a spouse has a job change that affects benefits. Carriers will allow these changes to be made as long as they are considered a life event, by the carrier’s definition, and they were advised within 31 days of the change. Failure to provide proper notice can result in denial. When this occurs, the employer can be at fault and could be legally liable. It’s for this reason that employee education is important: it ensures that employees are aware of the requirement, and protects employers as it confirms that they have done their part to assist employees in managing this detail.

    Keep employee and beneficiary information current

    Enrolment forms include both the beneficiary and the income, two key pieces of information that should be updated regularly. The income reported on group insurance plans can affect the level of insurance for life insurance, AD&D and short- or long-term disability, if applicable, and requires regular updates to ensure there are no errors concerning employee information. Errors can cause an issue at claim time that is easily avoided if administration updates are part of the employer’s process. All employee beneficiary designation forms should be updated regularly to ensure they reflect the employee’s current intent. Making this a part of an annually scheduled process to remind employees of their responsibility to update their beneficiary goes a long way in reducing any legal liability for an organization.

    It’s surprising just how important that enrolment form is! If you’d like to discuss this or any of the other due diligence items we regularly review with our clients, please contact Steve Marsh at Business Insurance Services or 905.777.9990, ext. 200.

  2. Three reasons why group benefits are so costly — and how you can address them

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    Group benefit costs continue to rise, but that’s not something you don’t already know. What you might not realize is why.

    Naturally, there are many varying reasons for general rate adjustments, and we don’t need to discuss the various justifications for why health and dental costs are on the rise. But it is worth reviewing the deeper-seeded components that factor in to plan costs — especially because, as an employer, you have some measure of control over these costs.

    Let’s take a look at three of them:

    Plan Design. This could be the greatest factor in why your costs are going up. If your plan is above industry norms, you will be attracting more claims from employees but also from their dependents, as under coordination of benefits (where a couple both have coverage), you will pay what other plans wouldn’t. Have you safeguarded against abuse and over-utilization in your plan? We are living in changing times, so if your group plan hasn’t changed, you are going to have more financial pressure than you can may be able afford. The changes we are talking about are not the typical benefit cutbacks, but rather a more forensic approach to benefit design that explores what your employees truly need. This type of review will reinforce the sustainability of your group plan.

    Claims Usage. The cost of your plan is directly correlated to claims paid. This requires us to focus on specific benefits, such as your health and dental, as these typically represent 60% of your total group benefit budget. And while this ties directly into the plan design you offer, it is also impacted by the mindset of your employees. Some employees will treat their group plan as an entitlement, with little regard for how the plan is used as it is company money, not their own. For this reason, engaging employees in the relationship between claims and costs and arming them with knowledge about why it is in their best interest to always be an aware consumer, even when it concerns their benefits, is critical to improving the results of your group plan. Corporate culture can have a significant bearing on your ability to partner with your employees and impact your bottom line.

    Carrier Costs. Have you noticed how complicated group benefits are getting? This confusion can frustrate employers and encourage rash decision-making over detailed analysis. However, a carrier’s costs can absolutely be an important factor in the group benefit cost conundrum, and avoiding it can quickly exacerbate the costs. Only through in-depth analysis by a group insurance expert/advisor can you confirm if you are paying too much for your plan. You can always market your group plan to test for competitiveness, but unless your advisor knows how the pricing of a plan works, you are likely boomeranging back to the same scenario, with a bad first renewal. So scrutiny of all the components of your plan’s costs is required to ensure you are obtaining real savings and can avoid the costly process of switching carriers cyclically.

    If you would like to explore the unique tools we use to address these key group benefit factors, please contact Steve Marsh at Business Insurance Services or 905.777.9990, ext. 200, today.

  3. Don’t have time to manage your benefits? Too busy doing other, more important things? Does it really matter to your bottom line?

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    We are living and working in fast times. With the technological revolution, it is no surprise that we often hear clients say that they just don’t have time to manage their benefits the way they would like to. Yet consider that group benefits cost an employer, on average, $3,500 per employee per year. With inflation this number is fast approaching $4,000 per employee per year, so maybe the question should be: How much are benefits affecting your bottom line?

    The real issue is how to find the time. This is where a trusted advisor can assist your organization. Someone who understands the group insurance business from the insurance carrier side, inside and out, and who can do the leg work that is required to ensure your plan is well designed, managed and negotiated, is key. Find a broker who will spend the time to analyze your group plan and understand your corporate culture and who is willing to invest the time needed to create the best group benefit solution for you and your employees.

    A seasoned group insurance advisor should understand how the insurance carrier/ industry and benefits work and be able to educate you and your employees by simplifying the information in written form, in person or via a multi-media format. We call this cutting through the benefit noise. Understanding group insurance doesn’t have to be complicated as long as a broker you trust is advocating for you and keeping watch over your numerous priorities in order to protect the interests of your organization.

    If you’d like to learn more about what we do for our clients and the creative ideas we implement to protect their plans, please contact Steve Marsh at smarsh@bisinc.ca or 905-777-9990, ext. 200.



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231 Main Street West, Main Floor
Hamilton, ON
L8P 1J4
Phone: (905) 777-9990
Email: rmarsh@bisinc.ca